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An Investigation of Housing Affordability in the UK Regions

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  • Alberto, Montagnoli
  • Jun, Nagayasu

Abstract

The housing market has been extensively investigated in the literature; however there is a lack of understanding of the fundamentals a ffecting housing affordability across UK regions as measured by the price to income ratio. The aim of this paper is twofold; fi rstly we calculate the a ffordability ratio based on individuals' incomes. Second we set o f to ask which socio-economic factors could a affect this ratio. The analysis finds a strong influence coming from the mortgage rate, the residents' age and academic quali fications. We also report a positive and signifi cant e ffect from foreign capital coming to the UK. Finally, we record a non-negligible degree of heterogeneity across the twelve regions.

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Paper provided by Scottish Institute for Research in Economics (SIRE) in its series SIRE Discussion Papers with number 2013-64.

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Date of creation: 2013
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Handle: RePEc:edn:sirdps:453

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Keywords: House market; a ffordability index; heterogeneity; panel data;

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